UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2007
                               -----------------

                                       Or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ________________to _________________

Commission File No.  0-8693
                     ------


                              TRANSNET CORPORATION
                              --------------------
             (Exact name of registrant as specified in its charter)

          DELAWARE                                     22-1892295
--------------------------------            -----------------------------------
(State or other jurisdiction of            (IRS Employer Identification Number)
Incorporation or organization)

45 Columbia Road, Somerville, New Jersey                08876-3576
----------------------------------------                -----------
(Address of principal executive offices)                (Zip Code)

Registrant's Telephone Number, Including Area Code:    908-253-0500
                                                       ------------

--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last Report

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                                            Yes   X       No ___
                                                                ----

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a non-accelerated  filer, or a smaller reporting company.
See definition of "large accelerated  filer",  "accelerated  filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

         Large accelerated filer____         Accelerated Filer ____
         Non-accelerated filed   X           Smaller reporting company ____
                                ---

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of February 5, 2008: 4,823,304.


<PAGE>




                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS



                                                                       PAGE NO.
                                                                       --------
PART I.  FINANCIAL INFORMATION

         Consolidated Balance Sheets
                  December 31, 2007 (unaudited) and June 30, 2007         1

         Consolidated Statements of Operations (unaudited)
                  Three Months Ended December 31, 2007 and 2006           2
                  Six Months Ended December 31, 2007 and 2006             3

         Consolidated Statements of Cash Flows (unaudited)
                  Six Months Ended December 31, 2007 and 2006             4

         Notes to Consolidated Financial Statements                       5

     Item 2.  Management's Discussion and Analysis                        7

     Item 4.  Controls and Procedures                                    11

PART II.  OTHER INFORMATION

     Item 6.  Exhibits and Reports on Form 8-K                           12

     Signatures                                                          12
     Certifications                                                      13


                                       i




<PAGE>


                       TRANSNET CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                   December 31,                June 30,
                                                                      2007                       2007
                                                                 ---------------             --------------
                                                                  (unaudited)
<S>                                                              <C>                         <C>
 ASSETS:
 CURRENT ASSETS

 Cash and Cash Equivalents                                       $  2,402,264                $  2,462,442
 Accounts Receivable - Net                                          5,992,706                   5,606,680
 Inventories                                                          778,106                     470,827
 Other Current Assets                                                  67,672                       9,032
                                                                 ---------------             --------------

 TOTAL CURRENT ASSETS                                            $  9,240,748                $  8,548,981

 PROPERTY AND EQUIPMENT - NET                                         351,315                     435,787

 OTHER ASSETS                                                         185,004                     183,544
                                                                 ---------------             --------------

 TOTAL ASSETS                                                    $  9,777,067                $  9,168,312
                                                                 ===============             ==============

 LIABILITIES AND STOCKHOLDERS' EQUITY:
 CURRENT LIABILITIES:
 Accounts Payable                                                $    892,793                $    741,993
 Accrued Expenses                                                     451,014                     231,651
 Income Taxes Payable                                                       0                       1,569
 Floor Plan Payable                                                 1,034,211                     802,020
                                                                 ---------------             --------------

 TOTAL CURRENT LIABILITIES                                       $  2,378,018                $  1,777,233

 COMMITMENT AND CONTINGENCIES                                              --                          --

 STOCKHOLDERS' EQUITY:
 Capital Stock - Common, $.01 Par Value,
 Authorized 15,000,000 Shares; Issued 7,408,524
 at December 31, 2007 and June 30, 2007
 [of which 2,585,220 are in Treasury at December 31,
 2007 and June 30, 2007]                                               74,085                      74,085

 Paid-in Capital                                                   10,574,670                  10,574,670

 Retained Earnings                                                  3,903,129                   3,895,159
                                                                 ---------------             --------------

 Totals                                                            14,551,884                  14,543,914

 Less: Treasury Stock - At Cost                                    (7,152,835)                 (7,152,835)
                                                                 ---------------             --------------

 TOTAL STOCKHOLDERS' EQUITY                                         7,399,049                   7,391,079
                                                                 ---------------             --------------

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $  9,777,067                $  9,168,312
                                                                 ===============             ==============
</TABLE>

 See Notes to Consolidated Financial Statements.




                                        1

<PAGE>

                       TRANSNET CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                        THREE MONTHS ENDED DECEMBER 31,
                                                                 --------------------------------------------
                                                                     2007                          2006
                                                                     ----                          ----
<S>                                                              <C>                         <C>
REVENUE

Equipment                                                        $  3,532,053                $     4,664,629

Services                                                            3,743,344                      3,115,679
                                                                 ---------------             ------------------

Total Revenue:                                                      7,275,397                      7,780,308
                                                                 ---------------             ------------------
COST OF REVENUE

Equipment                                                           3,152,269                      4,186,688

Services                                                            2,453,921                      2,430,650

Total Cost of Revenue                                               5,606,190                      6,617,338
                                                                 ---------------             ------------------

Gross Profit                                                        1,669,207                      1,162,970

Selling, General and Administrative Expenses                        1,652,177                      1,473,880
                                                                 ---------------             ------------------

Operating Income (Loss)                                                17,030                       (310,910)
                                                                 ---------------             ------------------

Interest Income                                                        13,410                         23,864
Interest Expense                                                      (54,364)
                                                                 ---------------             ------------------

Income (Loss) Before Tax Expense                                      (23,924)                      (287,046)

Income Tax (Benefit)                                                       --                       (104,784)
                                                                 ---------------             ------------------

Net (Loss) Income                                                $    (23,924)                $     (182,262)
                                                                 ===============             ==================

Basic Net Income (Loss) Per Common Share                         $      (0.00)                $        (0.04)
                                                                 ===============             ==================

Diluted Net Income (Loss) Per Common Share                       $      (0.00)                $        (0.04)
                                                                 ===============             ==================

Weighted Average Common Shares Outstanding - Basic
                                                                    4,823,304                      4,823,304
                                                                 ===============             ==================

Weighted Average Common Shares Outstanding - Diluted                4,823,304                      4,823,304
                                                                 ===============             ==================
</TABLE>

See Notes to Consolidated Financial Statements.




                                       2
<PAGE>



                       TRANSNET CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                        SIX MONTHS ENDED DECEMBER 31,
                                                                 ------------------------------------------
                                                                      2007                         2006
                                                                      ----                         ----
<S>                                                              <C>                         <C>
REVENUE

Equipment                                                        $  9,268,145                $     9,673,383

Services                                                            7,014,249                      6,478,247
                                                                 ---------------             ------------------

Total Revenue:                                                     16,282,394                     16,151,630
                                                                 ---------------             ------------------

COST OF REVENUE

Equipment                                                           8,262,208                      8,542,848

Services                                                            4,663,306                      4,844,489

Total Cost of Revenue                                              12,925,514                     13,387,337
                                                                 ---------------             ------------------

Gross Profit                                                        3,356,880                      2,764,293

Selling, General and Administrative Expenses                        3,317,414                      3,089,802
                                                                 ---------------             ------------------

Operating Income (Loss)                                                39,466                       (325,509)
                                                                 ---------------             ------------------

Interest Income                                                        27,782                         46,193

Interest Expense                                                      (59,276)

Income (Loss)  Before Tax Expense                                       7,972                       (279,316)

Provision for Income Tax (Benefit)                                         --                       (104,784)
                                                                 ---------------             ------------------

Net Income (Loss)                                                $      7,972                $      (174,532)
                                                                 ===============             ==================

Basic Net Income (Loss) Per Common Share                         $       0.00                $         (0.04)
                                                                 ===============             ==================

Diluted Net Income (Loss) Per Common Share                       $       0.00                $         (0.04)
                                                                 ===============             ==================

Weighted Average Common Shares Outstanding - Basic
                                                                    4,823,304                      4,823,304
                                                                 ===============             ==================

Weighted Average Common Shares Outstanding - Diluted                4,904,440                      4,823,304
                                                                 ===============             ==================
</TABLE>


See Notes to Consolidated Financial Statements.



                                       3
<PAGE>



                       TRANSNET CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                          SIX MONTHS ENDED DECEMBER 31,
                                                                -----------------------------------------------
                                                                       2007                         2006
                                                                       ----                         ----
<S>                                                              <C>                         <C>
OPERATING ACTIVITIES:

Net (Loss) Income                                                $      7,972                $      (174,532)
                                                                 ---------------             ------------------
Adjustments to Reconcile Net Income to Net Cash:

Depreciation and Amortization                                         115,499                        102,630

Provision for Doubtful Accounts                                            --                        (70,000)

Deferred Income Taxes                                                      --                       (104,784)

Changes in Assets and Liabilities:
(Increase) Decrease in:

Accounts Receivable                                                  (386,026)                    (2,989,964)

Inventory                                                            (307,279)                       558,684

Other Current Assets                                                  (58,640)                       (57,894)

Other Assets                                                           (1,958)                        (1,839)

Increase (Decrease) in:

Accounts Payable and Accrued Expenses                                 371,824                        448,374
Income Tax Payable                                                     (3,231)                        (5,370)
                                                                 ---------------             ------------------

Total Adjustments                                                $   (269,811)               $    (2,120,163)
                                                                 ---------------             ------------------

NET CASH - OPERATING ACTIVITIES - FORWARD                        $   (261,839)               $    (2,294,695)
                                                                 ---------------             ------------------

INVESTING ACTIVITIES:

Capital Expenditures                                             $    (30,530)               $       (41,710)
                                                                 ---------------             ------------------

NET CASH - INVESTING ACTIVITIES                                  $    (30,530)               $       (41,710)
                                                                 ---------------             ------------------

FINANCING ACTIVITIES -
Floor Plan Payable - Net                                              232,191                          4,021

NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS                                             $    (60,178)               $    (2,332,384)

BEGINNING OF PERIODS                                             $  2,462,442                $     4,034,495
                                                                 ---------------             ------------------

CASH AND CASH EQUIVALENTS AT END OF PERIODS                      $  2,402,264                $     1,702,111
                                                                 ---------------             ------------------

Supplemental Disclosures of Cash Flow Information:

Cash paid during the period for:

Interest                                                         $     59,276                $            --

Income Taxes                                                     $         --                $            --
</TABLE>

See Notes to Consolidated Financial Statements.


                                       4
<PAGE>


                       TRANSNET CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

(1.)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (a) Consolidation: The consolidated financial statements include the
       accounts of the Corporation and its wholly owned subsidiary, Century
       American Corporation. Intercompany transactions and accounts have been
       eliminated in consolidation.

       (b) Inventory: Inventory consists of finished goods. The Corporation's
       inventory is valued at the lower of cost (determined on the average cost
       basis) or market.

       (c) Cash and Cash Equivalents: For the purposes of the statement of cash
       flows, the Corporation considers highly liquid debt instruments,
       purchased with a maturity of three months or less, to be cash
       equivalents.

       (d) Revenue Recognition: Revenues related to our equipment sales are
       recognized when evidence of an arrangement exists, delivery of equipment
       has occurred, the sales price of the equipment being sold to our
       customers is both fixed and determinable and collectability of the
       accounts receivable related to the equipment sale is reasonably assured
       in accordance with SEC Staff Accounting Bulletin No. 104 Topic 13.

       Revenues related to our services are recognized as the service is
       performed using the percentage of completion method of accounting under
       which the total contract revenue during the term of an agreement is
       recognized on the basis of the percentage that each contract's
       proportional performance to date bears to the total completion of
       performance. Estimates of proportional performance are continuously
       monitored during the term of the contract, and recorded revenues and
       costs are subject to revision as the contract progresses.

       (e) Earnings Per Share: Earnings per common share - basic are based on
       4,823,304 weighted shares outstanding for the six and three months ended
       December 31, 2007 and 2006, respectively. Diluted are based on 4,904,440
       and 4,823,304 weighted shares outstanding for the six and three months
       ended December 31, 2007 and 2006, respectively.

       (f) In the opinion of management, the accompanying unaudited consolidated
       financial statements contain all adjustments consisting only of normal
       recurring adjustments necessary to present fairly the financial position,
       the results of operations and cash flows for the periods presented.

       (g) These statements should be read in conjunction with the summary of
       significant accounting policies and notes contained in the Corporation's
       annual report on Form 10-K for the year ended June 30, 2007.

       (h) The results of operations for the three and six months ended December
       31, 2007 are not necessarily indicative of the results to be expected for
       the entire year.

       (i) New Accounting Pronouncements:

           In June 2006, the FASB issued FIN No. 48, "Accounting for Uncertainty
           in Income Taxes - An Interpretation of FASB Statement No. 109
           Accounting For Income Taxes". This interpretation requires a
           recognition threshold and measurement attribute for the financial
           statement



                                       5
<PAGE>


           recognition and measurement of a tax position taken or expected
           to be taken in a tax return. This interpretation also provides
           guidance on derecognition, classification, interest, penalties,
           accounting in interim periods, disclosure and transition. This
           interpretation requires the evaluation of whether the technical
           merits of a tax position is more likely or not to be sustained
           upon examination, including the resolution of any related appeals
           or litigation. The Statement requires the measurement of the
           largest amount of benefit that is greater than a 50% likelihood
           of being realized upon final settlement, presuming the position
           will be examined by the appropriate taxing authority with the
           benefit of full knowledge and relevant information. The adoption
           of this interpretation is effective for fiscal years beginning
           after December 15, 2006.

           In September, 2006, the FASB issued SFAS No. 157, "Fair Value
           Measurements". This Statement defines fair value as 'exit prices' NOT
           'entry prices' in generally accepted accounting principles (GAAP),
           and expands disclosures about fair value measurements for the purpose
           of promoting consistency and simplification of the existing
           codification of accounting principles. To eliminate differences in
           practice and reduce complexity in the application of GAAP, the
           Statement emphasizes that fair value is a market-based measurement,
           not an entity specific measurement and should be determined based on
           the assumptions that market participants would use in pricing the
           asset or liability. This statement establishes a fair value hierarchy
           that distinguishes between observable and unobservable inputs and
           clarifies the need for adjustments to fair value based on
           nonperformance, and other market risk assessment criteria, certain
           asset or event restrictions, and trading blockage. The adoption of
           this Statement is effective for financial statements beginning with
           fiscal years on or after September 15, 2007, including interim
           financial statements within that fiscal year.

           In September 2006, the Securities and Exchange Commission released
           Staff Accounting Bulletin No. 108, "Considering the Effects of Prior
           Year Misstatements when Quantifying Misstatements in Current Year
           Financial Statements" ("SAB 108"). SAB 108 provides guidance
           regarding the methodology for quantifying and evaluating the
           materiality of financial statement misstatements. SAB 108 is
           effective for fiscal years ending after November 15, 2006.
           Application of the guidance in SAB 108 is not expected to have a
           material effect on the Company's financial position, cash flows, or
           results of operations.

           In October, 2006, the FASB issued SFAS No.158, "Employers' Accounting
           for Defined Benefit Pension and other Postretirement Plans- An
           amendment of FASB Statements No. 87, 88, 106 and 132(R)". This
           statement requires an employer to recognize the overfunded or
           underfunded status of a defined benefit postretirement plan, other
           than a multiemployer plan, as an asset or liability in its statement
           of financial position and to recognize changes in that funded status
           in the year in which the changes occur through the comprehensive
           income of a business entity. This statement requires the measurement
           and recognition of the difference between plan assets at fair value
           and the benefit obligation, as of the date of the employer's fiscal
           year-end statement of financial position. This statement also
           requires additional disclosure in the footnotes to the financial
           statements about certain effects on net periodic benefit cost for the
           next fiscal year that arise from delayed recognition of the gains or
           losses, prior service costs or credits, and transition assets or
           obligations. Employers who have issued outstanding publicly traded
           equity securities are required to adopt this Statement by initially
           recognizing the funded status of a defined benefit postretirement
           plan including the required footnote disclosures as of the end of the
           fiscal year ending after December 15, 2006.


                                       6
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Overall revenues decreased slightly in the quarter ended December 31, 2007 as
compared to the same period in the prior year, primarily due to a decrease in
equipment sales, and despite an increase in service revenues. Revenues for the
quarter ended December 31, 2007 were $7,275,397, as compared to $7,780,308 for
the quarter ended December 31, 2006. For the quarter ended December 31, 2007 the
Corporation reported a net loss of $23,924 as compared with a net loss of
$182,262 for the similar period in the prior fiscal year. Revenues for the six
months ended December 31, 2007 were $16,282,394 as compared with $16,151,630 for
the same period ended December 31, 2006, with net income of $7,972 for the
six-month period ended December 31, 2007, compared with a net loss of $174,532
for the same period in the prior fiscal year.

During the quarter and six-month period in 2007, revenues from hardware sales
decreased due to an overall reduction in sales of equipment. During the quarter
and six months in 2007, service revenues increased, particularly higher
profit-margin services, in part due to the reduction in use of subcontractors to
provide these services. Gross profit margins on technical services increased
during both the quarter and six month period in fiscal 2008, as compared to the
prior year. Management notes that the higher level of technical sophistication
of projects such as VoIP installations require the Corporation to maintain a
high skill level among its technical staff, with corresponding increases in
salaries and related personnel costs, which may impact profit margins. Profit
margins on hardware sales increased in the December 2007 quarter, and remained
relatively constant during the six month period, as compared to prior year
periods.

During the fiscal periods discussed, the Corporation performed under contract
awards for VoIP products and services, the performance of which will extend over
several quarters, pending construction of the sites into which the systems will
be installed and implemented. Management notes that some of these projects were
affected by construction delays beyond the Corporation's control, and these
delays resulted in some order backlogs. None of these delays had any significant
impact upon the operations of the Corporation. During the periods discussed, the
Corporation's clients continued to be conservative in their IT budgetary
spending and to scrutinize their IT spending and the related returns on
investments before incurring new expenses. As a result, management refocused its
attention on utilization rates of its service technicians and selling and
administrative expenses in an effort to reduce expenses.

Management believes that clients' future spending will be subject to specific
criteria, but also believes that as single source provider, the Corporation will
be in a better position to satisfy client demands for cost-effectiveness and a
suitable return on investment. The VoIP networks marketed by TransNet are
designed with the capacity for "optimization" through the subsequent addition of
layers of solutions, for ex., security solutions. We are confident that our
strategy of being an advanced solutions provider will result in future revenues
from clients' optimization of already installed networks. In conjunction with
these solutions, we note the rapid development of technologies which now allow
for the integration of voice, video, and data at levels not seen before now, and
which provide clients with greater operating efficiencies.

As part of the industry competition pressures discussed herein, management
continues to see certain erosion in business related to Fortune 500 customers as
those customers enter into and/or expand business relationships with large
global partners and the transfer of this business to overseas service providers,
such as those in India, which continued in the December 2007 quarter. Management
believes that


                                       7
<PAGE>


projects performed during the first two quarters of fiscal 2008 and 2007
replaced much of the reduced business, and believes its focus on higher margin
services related to VoIP/IP Telephony and security will lead to continued growth
and opportunities that will help compensate for this reduction. No assurances
can be given, however, that the Corporation will be able to replace the loss of
its business from these legacy services, or that operations will not be
adversely effected.

Service related revenues, a material segment of revenues, are significant in
their contributions to net income because these operations yield a higher profit
margin than equipment sales. Services during the periods discussed are comprised
primarily of services related to the sale and implementation of VoIP networks.
These services include planning, design, configuration, installation and
implementation, testing, and optimization. Revenues are also generated by a
variety of support contracts for these networks. Under these agreements,
TransNet's Support Center provides troubleshooting, diagnosis, and remedial
services performed remotely by skilled system engineers, who will be dispatched
to perform on-site repairs, if necessary. The agreements are for twelve months,
and provide a range of guaranteed response time, based upon the client's
specific response requirements or the nature of the outage. The availability of
these services is determined by the client, from 24/7 to next business day. In
addition, our system engineers and service technicians provide service and
support on an on-call basis. Additionally, for the fiscal periods discussed, as
noted above, revenue resulting from contracts with corporate clients for the
provision of service, support, outsourcing, and network integration has
decreased, in conjunction with the erosion of demand for these services. Those
service contracts, with a number of corporate and educational customers, provide
service and support for the customer's personal computers, peripherals, and
networks. These contracts are short-term, and contain provisions which permit
early termination. Although the contracts generally contain renewal terms, there
is no assurance that such renewals will occur.

As noted above, with respect to certain support services, services are performed
for a specific project, such as a VoIP installation, rather performed under a
services related contract, under which technical services are provided for a
specific period of time. Accordingly, the Corporation must rely more upon
projects as a source of revenues. Industry changes have also diminished the
demand for certain legacy support services such as help-desk services, while
increasing the demand for services such as those related to VoIP systems and
call centers. The Corporation has modified its service offerings in response to
these industry fluctuations, and has recruited experienced and specially
certified systems engineers and project managers to respond to increased VoIP
projects.

In addition to the challenging economic environment, the computer industry has
experienced a continuing trend of decreasing prices of computers and related
equipment. Management believes that this trend will continue. Industry-wide, the
result of price erosion has been lower profit margins on sales, which require
businesses to sell a greater volume of equipment to maintain past earning
levels. Another result of the price decreases has been intensified competition
within the industry, including the consolidation of businesses through merger or
acquisition, as well as the increased initiation of sales by certain
manufacturers directly to the end-user and the entrance of manufacturers into
technical services business. Management believes that the adoption of policies
by many larger corporate customers, which limit the number of vendors permitted
to provide goods and services for specified periods of time, has further
increased price competition.

To meet these competitive challenges and to maximize the Corporation's profit
margin, management has modified its marketing strategy during these years and
has enforced expense controls. Management also utilizes approaches such as
manufacturers' direct shipment and billing of the customers in exchange for
payment to the Corporation of an "agency fee" as a means to reduce equipment
related costs while increasing profits. These direct ship sales supplement sales
through traditional channels, and are not material. Management's current
marketing strategy is designed to shift its focus to provision of technical



                                       8
<PAGE>


services and to sales of lower revenue/higher profit margin products related to
service and support operations. Management's efforts include targeting
commercial, educational, and governmental customers who provide marketplaces for
a wide range of products and services at one time, a cost-effective approach to
sales. These customers often do not have their own technical staffs and
outsource their computer service requirements to companies such as TransNet.
Management believes it maximizes profits through concentration on sales of
sophisticated unified communications solutions; promotion of the Corporation's
service and support operations; and strict adherence to cost cutting controls.
In light of the above, management emphasizes and continues the aggressive
pursuit of an increased volume of sales of VoIP systems, and related technical
service and support programs, and has introduced new technical support programs
offering a wide variety of alternatives of remote and on-site network support
and monitoring. Management believes that product sales will continue to generate
a significant percentage of the Company's revenues. In addition, the
Corporation's buying agreement with Ingram Micro, Inc. enhances the
Corporation's competitive edge through product discounts unavailable through
other sources.

The Corporation's performance is also impacted by other factors, many of which
are not within its control. These factors include: the short-term nature of
client's commitments; patterns of capital spending by clients; the timing and
size of new projects; pricing changes in response to competitive factors; the
availability and related costs of qualified technical personnel; timing and
customer acceptance of new product and service offerings; trends in IT
outsourcing; product constraints; and industry and general economic conditions.

During the quarter ended December 31, 2007, selling, general and administrative
expenses increased to 23% of revenues as compared to 19% of revenues in the same
period in the prior year. For the six month period in fiscal 2008, selling,
general and administrative expenses increased to 20% of revenues as compared to
19% of revenues in the same period in the prior year, in part due to the
reduction of revenues. These increased expenses include those management
incurred to further expand its sales staff, and invest in the expertise of its
sales and support teams, their certifications, and corporate infrastructure.
Management incurred these expenses as investments required to meet the demands
of the current IT environment, and to lead to sustainable growth for the
Corporation. Management continues its efforts to control expenses, despite
increasing personnel related costs, such as health benefits.

Interest income decreased in the second fiscal quarter of 2008 as compared to
the comparative quarter as a result of lower interest rates and lower amounts
invested. During the periods discussed in fiscal 2008, the Corporation incurred
interest expense associated with its floor planning payables. The expenses
resulted from changes in payment schedules and were impacted by the necessity to
order inventory to meet existing orders.


LIQUIDITY AND CAPITAL RESOURCES

There are no material commitments of the Corporation's capital resources, other
than floor planning commitments.

The Corporation currently finances a portion of its accounts receivable and
finances purchases of portions of its inventory through floor-planning
arrangements under which such inventory secures the amount outstanding. Floor
planning payables increased significantly in the 2007 period compared to the
same period in 2006 as the result of purchases underlying equipment sales to
meet existing orders. The increase was also impacted by the increase in accounts
receivable from New Jersey state and local governmental entities, as these
entities have slower payment cycles. Inventory increased in the six month



                                       9
<PAGE>


period ended December 31, 2007 as compared to the corresponding period in 2006
to meet sales orders received in the December quarter.

Accounts receivable increased for the interim period ended December 31, 2007 as
compared to the same period in 2006 as a result of the increased level of
business conducted with governmental agencies which have extended and slower
payment cycles than non-governmental agencies. Management has initiated efforts
to expedite payments from the governmental bodies. Receivables also increased
due to business with commercial customers during the latter part of the December
quarter. Cash levels remained relatively constant during the six months ended
December 31, 2007 as compared to the same period in 2006, when funds were used
to finance hardware sales and were impacted by the increase in accounts
receivable. Accounts payable increased in the interim period of fiscal 2008 as
compared to the same quarter in fiscal 2007 because the Corporation expanded
product offerings required purchases from vendors outside its floor planning
arrangements.

For the fiscal quarter and six months ended December 31, 2007, as in the similar
periods in the prior year, the internal resources of the Corporation were
sufficient to enable the Corporation to meet its obligations.

IMPACT OF INFLATION

The effects of inflation on our operations were not significant during the
periods presented.


CONTRACTUAL OBLIGATIONS

<TABLE>
<CAPTION>
                                                  Less than         1-3            4-5         More than
Contractual Obligations            Total          One Year         Years          Years         5 Years
-----------------------            -----          --------         -----          -----         -------
<S>                             <C>               <C>            <C>             <C>
Real Estate Lease               $587,748          $185,605       $371,210        $30,933             --

Office Equipment                 $24,864            $7,104         14,208          3,552             --
</TABLE>

CRITICAL ACCOUNTING POLICIES

The Corporation's financial statements are prepared in accordance with
accounting principles that are generally accepted in the United States. The
methods, estimates, and judgments used in applying these most critical
accounting policies have a significant impact on the results reported in the
financial statements. The Securities and Exchange Commission has defined
critical accounting policies as policies that involve critical accounting
estimates that require (a) management to make assumptions that are highly
uncertain at the time the estimate is made and (b) different estimates that
could have been reasonably used for the current period, or changes in the
estimates that are reasonably likely to occur from period to period, which would
have a material impact on the presentation of our financial condition, changes
in financial condition or in result of operations. Based on this definition, the
most critical policies include: revenue recognition and allowance for doubtful
accounts.

Revenue Recognition
-------------------

Revenues related to our equipment sales are recognized when evidence of an
arrangement exists, delivery of equipment has occurred, the sales price of the
equipment being sold to our customers is both fixed and determinable, and
collectability of the accounts receivable related to the equipment sale is
reasonably assured in accordance with SEC Staff Accounting Bulletin No. 104
Topic 13.


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<PAGE>

Revenues related to our services are recognized as the service is performed
using the percentage of completion method of accounting under which the total
contract revenue during the term of an agreement is recognized on the basis of
the percentage that each contract's proportional performance to date bears to
the total completion of performance. Estimates of proportional performance are
continuously monitored during the term of the contract, and recorded revenues
and costs are subject to revision as the contract progresses.

Accounts Receivable
-------------------

Accounts receivable are reported at their outstanding unpaid principal balances
reduced by an allowance for doubtful accounts, based on certain percentages of
aged receivables. We estimate doubtful accounts based on historical bad debts,
factors related to specific customers' ability to pay and current economic
trends.


THE MATTERS DISCUSSED IN MANAGEMENT'S DISCUSSION AND ANALYSIS AND THROUGHOUT
THIS REPORT THAT ARE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT MANAGEMENT
EXPECTATIONS THAT INVOLVE RISK AND UNCERTAINTIES. POTENTIAL RISKS AND
UNCERTAINTIES INCLUDE, WITHOUT LIMITATION: THE IMPACT OF ECONOMIC CONDITIONS
GENERALLY AND IN THE INDUSTRY FOR MICROCOMPUTER PRODUCTS AND SERVICES;
DEPENDENCE ON KEY VENDORS; CONTINUED COMPETITIVE AND PRICING PRESSURES IN THE
INDUSTRY; PRODUCT SUPPLY SHORTAGES; OPEN-SOURCING OF PRODUCTS OF VENDORS; RAPID
PRODUCT IMPROVEMENT AND TECHNOLOGICAL CHANGE, SHORT PRODUCT LIFE CYCLES AND
RESULTING OBSOLESCENCE RISKS; TECHNOLOGICAL DEVELOPMENTS; CAPITAL AND FINANCING
AVAILABILITY; AND OTHER RISKS SET FORTH HEREIN.


ITEM 4.  CONTROL AND PROCEDURES

The Chief Executive Officer and Chief Financial Officer of the Corporation have
concluded, based on their evaluation as of December 31, 2007, that the
Corporation's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Corporation in the reports filed or
submitted by it under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and include controls and
procedures designed to ensure that information required to be disclosed by the
Corporation in such reports is accumulated and communicated to the Corporation's
management, including the Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.

There were no significant changes in the Corporation's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of such evaluation.



                                       11
<PAGE>


                                     PART II
                                OTHER INFORMATION


ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

         A.  Exhibits -
             31.1 Certification required by Section 302
             31.2 Certification required by Section 302
             32 Certification required by Section 906

         B.  Reports on Form 8-K -
             On November 20, 2007, TransNet Corporation filed a Form 8-K under
             Item 7.01.


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                   TRANSNET CORPORATION
                                   (Registrant)


                                   /s/ STEVEN J. WILK
                                   --------------------------------------
                                   Steven J. Wilk, President and
                                   Chief Executive Officer


                                   /s/ JOHN J. WILK
                                   ---------------------------------------
                                   John J. Wilk,
                                   Principal Financial and Accounting Officer
                                   And Chairman of the Board of Directors


DATE:  February 13, 2008


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